Washington (AFP) – The International Monetary Fund on Wednesday censured Venezuela for failing to provide key economic data in a process that eventually could result in the Latin American nation’s expulsion from the fund.
The IMF board concluded that Venezuela had failed to implement measures the fund called for last year or provide key information.
“The Fund has issued a declaration of censure against Venezuela,” the IMF said in a statement. “The Executive Board called on Venezuela to adopt specific remedial measures and will meet again within six months to consider Venezuela’s progress in implementation.”
Crisis-impaired Venezuela, which the IMF recently described as one of the worst economic collapses in modern history, is not borrowing from the Washington-based fund, so in practice it has little leverage to insist on changes.
The IMF had already warned Venezuela for failing to provide economic data as required of all 189 members so that it can monitor their economies. The fund has not been able to conduct the annual review of the Venezuelan economy since 2004.
Possible ramifications to IMF censure include a suspension to the right to vote, a suspension of financing and, in extreme cases, ejection. The fund has only taken this last step one time, ejecting Czechoslovakia in 1954.
The IMF censured Argentina in 2013 over criticism of economic and inflation data that mainstream economists viewed as unrealistic. The fund lifted this status in 2016 and has resumed annual fiscal checkups.
“The Fund stands ready to work constructively with Venezuela toward resolving its economic crisis when it is prepared to re-engage with the Fund, including through timely and regular data provision,” the IMF said
The IMF last provided funding to Venezuela in 2001 and the country has not sought funding from the fund since then.
IMF officials estimate that the Venezuela economy has contracted about 45 percent over the last year.
The country also faces hyperinflation, with prices expected to rise 13,000 percent. And oil production has fallen by half in the last 18 months, Alejandro Werner, director of the IMF’s Western Hemisphere Department said last month.
“It is one of the worst economic crises we have seen in modern economic history,” Werner said on the sidelines of the IMF’s spring meeting.
Venezuelan President Nicolas Maduro is seeking reelection in a May 20 referendum that has been criticized as illegitimate by much of the international community.
In a statement at the Summit of the Americas, Washington and the 16-nation Lima Group, which counts Latin America’s biggest economies, said the poll would be “void of legitimacy and credibility” if it went ahead under current conditions.